February 27, 2013 / 6:05 PM / in 5 years

EMERGING MARKETS-Latam stocks up on Italy bonds, U.S. Fed policy

By Anthony Esposito
    SANTIAGO, Feb 27 (Reuters) - Latin American stocks were up
on Wednesday, building off the momentum provided by a healthy
appetite at an auction of Italian government debt and the U.S.
Federal Reserve Bank's defense of its monetary stimulus
    Investors were focused on Fed Chairman Ben Bernanke's second
day of testimony in Congress following remarks on Tuesday that
eased worries over a possible early retreat from the U.S.
central bank's policy of bond purchases. 
    Some market participants were also relieved to see Italy,
the euro zone's third largest economy and struggling with an
inconclusive election, sell all 6.5 billion euros of the 5- and
10-year bonds it offered investors earlier Wednesday.
    Italy's  borrowing costs rose to their highest in four
months but the first bond auction since the election eased fears
that the political deadlock could destabilize Europe's
second-biggest sovereign debt market. 
    "The successful bond auction injected a good dose of
confidence into markets around the globe, though those
confidence levels are still shy of where they were" before the
elections, said Alfredo Parra, analyst at brokerage EuroAmerica
in Santiago.
    Brazil's Bovespa index rose 0.32 percent to 57,129.14
points, continuing its climb from a three-month low hit last
week amid concerns that Latin America's top economy could raise
interest rates to fight inflation as growth remains sluggish.
    Morgan Stanley & Co's Brazil Corporate Outlook Index earlier
in the day said the outlook for Brazilian companies appears to
be solid, as the vast majority of companies expect margins to
either improve or remain stable, despite inflationary pressures
that have appeared year-to-date..
    "We have observed some positive corporate results in Brazil,
in a context in which shares are cheap on the stock market. This
perception of low share prices with a better medium to long term
view for the companies tends to benefit the blue-chip index in
Brazil," said Bruno Piagentini of brokerage Coinvalores in Sao
    Lifting the Bovespa, shares of Banco do Brasil 
rose 2.91 percent, after it filed late on Tuesday to list its
insurance and pension unit on the Sao Paulo Stock
Exchange. Miner Vale limited gains on
the bourse, falling 0.48 percent as investors anxiously awaited
its quarterly results after market close.
    Mexico's IPC stock index, meanwhile, increased 0.42
percent to 43,671.33 points, recovering from the two-month low
it hit a day earlier. 
    The IPC has slipped more than 5 percent from the all-time
high it hit in January, hurt by weaker-than-expected earnings
and worries that U.S. lawmakers could fail to avert spending
cuts that could slow the economy of the United States, Mexico's
top trading partner.
    Retailer Walmart de Mexico's shares increased
0.75 percent, rising for the third straight session.
    Chile's IPSA index expanded 0.43 percent to 4,518.88
points, following two consecutive sessions of declines. Shares
in industrial conglomerate Copec rose 0.87 percent.

      Latin America's key stock indexes at 17:12 GMT: 
 Stock indexes                       daily %    YTD %
                                      change   change
 MSCI LatAm                3,780.71     0.32    -0.77
 Brazil Bovespa           57,129.14     0.32    -6.27
 Mexico IPC               43,671.33     0.42    -0.08
 Chile IPSA                4,518.88     0.43     5.06
 Chile IGPA               22,054.58     0.34     4.67
 Argentina MerVal          3,157.05      1.2    10.61
 Colombia IGBC            14,832.48     0.44     0.79
 Peru IGRA                20,621.89    -0.28    -0.04
 Venezuela IBC            618,924.5      0.5    31.28

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